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Category: Finance

Finally, a word of sense about the Social Security Trust Fund from a mainstream financial columnist:

And, no, the [Social Security Trust Fund] could not have been invested elsewhere. First, it would have overwhelmed the private investment markets. (Scott Burns, The “Truth” about Social Security)

What he’s talking about: The Social Security Trust Fund was a hoax even when Alan Greenspan started it. It represents money the government “borrowed” from itself and then spent.

It’s like spending from my retirement account and then putting IOUs in my wallet. Those IOUs are worthless; they are not an asset. The Social Security Trust Fund is the same thing; it has no value.

But you say, “The government could have saved the money…” Um, yeah, holding $2,300,000,000,000 ($2.3 trillion) means deflation. Then spending it down would be inflationary.

Or it could have invested $2,300,000,000,000–meaning the government owns $2,300,000,000,000 of the “private” economy. That’s called a state-controlled economy, run by the same geniuses who brought us drivers’ license offices.

Even a 50%/50% compromise is bad: $1,150,000,000,000 in withheld cash and $1,150,000,000,000 of government-owned economy.

Social Security is, by necessity, a “pay as you go” system. There is no way to save for the future. If Social Security costs too much, then we’ve over-promised.

…it’s certainly a deterrent for me to walk down one side of the street when I see twenty yards in front of me a gang of menacing-looking thugs approaching from the opposite direction. I’m most likely to cross the street and avoid the possible confrontation. … However, if I were told as I walked down that sidewalk (with no thugs in sight) that some number of years after I have walked down the sidewalk, a group of thugs might be called together (after much legal wrangling and automatic appeals, etc.) and might possible menace me for having had the audacity to walk down that sidewalk on their side of the street — I probably wouldn’t be deterred.

This argument applies to any punishment far removed from the crime, including Texas’s silly “Driver Responsibility” fees. They have no deterrent effect, and they are not paying for a service.

This is simply a way that liberals and too many Republicans hide new taxes.

This blog post was to be about converting to Mint.com. I’m instead sticking with Microsoft Money.

Mint.com’s philosophy, and biggest failure, is low effort. They want a low effort user experience, but they have a low effort technical staff: instead of finding simplified ways of doing complex tasks, they just leave them out!

Sure, this is “complicated” because I must manually schedule these transactions. But it removes complexity because they are pre-entered before my monthly bill-paying session.

Mint.com doesn’t have a hint of this. It even lacks logic to suggest recurring transactions–that could have allowed them to simplify an otherwise complex feature.

Another is manual transactions. Mint.com is reactive: it only has what it downloads from financial service providers. You can’t enter transactions.

That’s a disaster for my checking account. I have no record of a check until it’s deposited!

How do you track outstanding checks, including ones that have sat undeposited for months or weeks? How do you know your true available balance? Currently, it must be some other log that you must constantly monitor and update. No way, that’s terribly error-prone!

Thanks to Microsoft Money, I don’t bounce checks!

Mint.com, on the other hand, requires a gigantic cash pad, loins girded for overdraft fees, or tricky accounting using other programs.

Mint.com is a fail. Its slick user interface redeems it from epic fail. But behind the user interface is a painfully simplistic system. I can appreciate the complexity of the infrastructure needed to support this system, but I cringe at how little it really does for its users.

Above, I wrote I am using Microsoft Money “for now.” I don’t know where I’m going. Quicken suffers from a kludgy user interface and Intuit’s anti-consumer business practices. Plus it can’t convert my Money data yet.

Rumor has it that Quicken 2010 will have better Microsoft Money import capabilities. I’m still with Microsoft Money for a few more months.

This bailout is–literally–leftist Congressmen buying votes from their leftist union friends. A few supposed conservatives jumped on for flaky reasons, including “my district needs a bailout, too”; paranoia of economic apocalypse; and because they fear unionized constituents.

Generations of automaker management have failed to convert their supposed vision into quality products. That’s partly why domestics have made crap cars for decades.

But if vision is currency, unions are the eyeball gougers. When unions guzzle so much revenue, what’s left but scraps? What funds innovation? Management’s #1 fault is playing nice with unions.

Did the Senate kill the union bailout? Perhaps, but, again, the unions caused the failure: they stubbornly refused meaningful compensation concessions. Senate Republicans demanded they drop wages to PhD college professor-levels instead of medical doctor levels. Either way, union members would still be overpaid for turning a screwdriver all day.

I hope this debate causes a colossal shift in union legitimacy.

Unions have their place. I support them when they rise against bona fide workplace abuses.

But when become institutionalized, when their purpose is a monopoly on labor, when they violate our Constitutional right to free association (“closed shop”), unions are a strategic blunder. They shift broad economic focus from what makes the United States special–innovation–and instead try make us like every other gray, socialist or communist country–artificial wage inflation. That’s why domestic automakers are failing–unions converted them from innovators into a socialist jobs program.

It’s time for the auto unions to go. If the foreign automakers’ non-union employees are so highly paid, then domestics can pull it off, too.

One last note: Nancy Pelosi claims we’re playing “Russian roulette” by not bailing out her union buddies. In fact, any Russian roulette is when the bailout debt causes future inflationary pressure.